SID SALTER: Recession's likely to gin up a lottery run

With all the political and economic stars in alignment, look for yet another failed attempt at getting a state lottery passed in Mississippi during the 2011 legislative session.
The state is facing current Fiscal Year 2011 state budget cuts averaging about 12.5 percent and anticipates FY 2012 budget cuts of a projected 23 percent. The till is bare in state, county and municipal governments as sales tax collections continue to stagnate.
Despite back-to-back months in which the state’s revenue projections have been met and exceeded the current fiscal year, pessimism reigns as lawmakers face the budget hearing process later this month.
Mississippi is one of only seven states – the others are Alabama, Alaska, Hawaii, Nevada, Utah and Wyoming – that doesn’t have a state lottery. Arkansas was the latest state to join the lottery during the 2010 fiscal year.
How’s the lottery working out for Mississippi’s neighbors? Louisiana raised $137 million in state revenue from the lottery in FY 2009. Tennessee raised $280 million. Florida raised $1.285 billion. Georgia raised $872 million and South Carolina raised $260 million.
Nationally, however, the recession hit lotteries just like other enterprises. According to the National Conference of State Legislatures, lottery revenues declined in FY 2009 in 25 states, the District of Columbia and Puerto Rico – some 61 percent of all states and territories in the lottery business.
During the 2010 session, state Rep. Alyce Clarke, D-Jackson, tried again to get legislation authorizing a state lottery through the Legislature. Again, the “unintended coalition” knocked the legislation flat.
The “unintended coalition” is comprised of the existing casinos companies, their business friends, and the political power structure loyal to both groups and the state’s churches. It reminds me of the political coalition that always joined forces to defeat local option liquor elections in rural Mississippi counties – the preachers and the bootleggers.
In response to Clarke’s lottery legislation, Gov. Haley Barbour repeated his steady opposition to a state lottery. Barbour says he doesn’t like the idea of the state luring citizens to play the lottery and that he believes a lottery would “cannibalize” existing casinos gross receipts.
Mississippi’s churches consistently say Mississippi already has too much gambling and doesn’t need any more. Those voices point out that while the casinos are isolated, lottery ticket sales would be in every community in Mississippi.
The most recent data suggests that lotteries certainly aren’t a sure revenue bet and are subject to recessions and other economic impacts. There is also the political reality that if Mississippi adopted a state lottery to provide scholarships for higher education as is done in the other Southern states, traditional funding would almost certainly decline.
But in hard times and particularly in hard times accompanied by historic budget cuts and an election year in which new general taxes are deader than dead-on-arrival, lawmakers will almost certainly turn to “sin tax” gimmicks and the lottery is just too tempting for all 174 lawmakers to resist when revenue is short.
As the lottery debate continues, remember this: Mississippi gave away the store to the commercial casinos. Mississippi has the second-lowest state gaming tax rate in the country behind only Nevada. Mississippi levies a 12 percent tax rate on gross casino gaming revenues, of which 8 percent goes to the state and 4 percent to local governments. Louisiana levies 21.5 percent, plus another 4 percent local tax.
“Protecting” Mississippi’s existing casinos is a true sucker’s bet.
Sid Salter is Perspective editor at The Clarion-Ledger and a syndicated columnist. Contact him at (601) 961-7084 or ssalter@jackson.gannett.com.